A total of $154.5 million from the Obama administration has been set aside to contain Michigan foreclosures. Over 17,000 underwater and unemployed homeowners are expected to save their homes from foreclosure.
Of these 17,000 distressed homeowners, about 11,000 borrowers currently receiving unemployment benefits are expected to get help so they can continue making their monthly home loan payments.
The $154.5 million was part of the $1.5 billion given by the federal government to five states to help them launch programs focused on underwater and unemployed homeowners with mortgages. The four other states were California, Florida, Nevada and Arizona.
The state of Michigan has designed options to help certain types of distressed homeowners save their homes from bank foreclosures. These three types are unemployed homeowners, borrowers who have just got re-employed or recovered from medical emergencies, and homeowners who could no longer make their loan payments because of reduced income.
The unemployed will be provided with loan payment assistance, the newly re-employed will be given rescue funds, and those with reduced income will be helped through loan principal reductions.
The state plan to cut down Michigan foreclosures using the allotted $154.5 million was developed with help from a lot of groups including the Michigan Credit Union League, the Michigan Bankers Association and the Michigan Association of Community Bankers.
The Michigan plan is expected to be approved by the U.S. Treasury Department in June and the money is expected to be available for use in the summer. It was the Michigan State Housing Development Authority and Michigan Governor Jennifer Granholm who announced the state plan this week, about two months since President Obama announced the provision of $1.5 billion to the five states most battered by the foreclosure crisis.
According to program planners, there are no family income limits to get qualified for assistance under the new program, but the type of assistance to be given will consider those who have been hit hardest by the crisis. Since distressed borrowers can only choose one option, their financial situation and mortgage status will be reviewed by loan servicers who will help borrowers choose the best that fits their situation.
Troubled homeowners can obtain further information about the new program from the website of the MSHDA. According to state planners, the state was not given a deadline to use up all the federal funds. The state can continue pursuing its special programs to cut down Michigan foreclosures until the funds are completely administered.
John Cutts has been educated in the finer points of the foreclosure market over 5 years.
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